The Reserve Bank of India (RBI) announced its first bi-monthly monetary policy for FY26 on April 9, 2025. The Monetary Policy Committee (MPC) decided to reduce the repo rate by 25 basis points, bringing it down to 6% from the previous rate of 6.25%. This marks the second consecutive rate cut, following a similar reduction in February 2025.
Key Rates:
- Repo Rate: Reduced from 6.25% to 6%.
- Reverse Repo Rate: Revised from 6% to 5.75%.
- Standing Deposit Facility (SDF) Rate: Decreased from 5.75% to 5.50%.
- Marginal Standing Facility (MSF) Rate: Lowered from 6.50% to 6.25%.
- Bank Rate: Dropped from 6.50% to 6.25%.
The decision to lower rates reflects the RBI’s accommodative stance to boost economic growth amidst moderating inflation and global challenges. The US’s imposition of a 26% tariff on Indian imports could reduce India’s GDP growth by 20–40 basis points for FY26, lowering it from the earlier forecast of 6.7% to approximately 6.1%.
Governor Sanjay Malhotra highlighted the sharp decline in food inflation as a positive trend while cautioning against global uncertainties and weather-related risks. This proactive move underscores the RBI’s commitment to balancing inflation control with growth and supporting economic stability.
